Apple, Publishers Target of EU Antitrust Investigation Over E-books

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The European Commision announced today that it is launching an investigation into the sales of e-books in the European market. The targets of the investigation include Apple and five publishing houses: Hachette Livre of France, HarperCollins and Simon & Schuster of the US, Penguin of the UK, and Verlagsgruppe Georg von Holzbrinck, the German company that owns Macmillan. The goal of the probe is to learn whether the five houses and Apple violated the EU’s antitrust rules by stifling competition in the European Economic Area.

The specific focus of the investigation will be the agreements between the publishing groups and Apple, and on the companies’ business practices, both of which the Commission suspects of being designed to smother competition. To that end, the Commission initiated investigative proceedings in March by conducting unannounced inspections of several of the companies named. The British Office of Fair Trade had been conducting its own inquiry in parallel with that of the EC, but has since concluded that investigation in order to collaborate with the Commission’s probe.

The Commission’s press release is silent on one important point: it does not say how, specifically, the companies are suspected of violating antitrust laws. The Commission gives no hint as yet to which practices or agreements cause concern. The Commission was also careful to point out that the opening of this investigation does not constitute a judgment of guilt on any of the involved companies, only that the Commission is now making this investigation a priority.

Meanwhile, the Wall Street Journal has published brief statements from the Pearson Group (owners of Penguin), HarperCollins, and Verlagsgruppe Georg von Holtzbrinch, all denying any wrongdoing and pledging to cooperate fully with the investigation.

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